Wednesday, August 3, 2016

Thousands in Las Vegas have yet to see a so-called economic recovery. One in 4 homeowners in Las Vegas area are underwater, the third highest rate nationally behind Cleveland and Akron, Ohio. As neighborhoods emptied due to foreclosures, violent crime moved in. A father who takes his children to a Las Vegas park now goes armed-NY Times, 8/2/16

"Michael
Hutchings bet it all when he built his 3,300-square-foot dream home on a
strip of rock-strewn desert gazing west toward the Las Vegas Strip. He
had made a fortune building custom homes as Vegas boomed higher and
higher, and for his own, he chose red Spanish tiles, wrought iron and
silky white plaster. A guesthouse? Sure. Swimming pool? Of course.

Over
the protests of his wife, Terrisa, Mr. Hutchings now stashes an unloaded
shotgun in the bedroom closet and a handgun in the kitchen cabinets,
tucked beside the glassware.

He
could walk away from his mortgage and lose the $580,000 he has paid, or
he can keep pouring his savings into the same hole. It is a mess with
no good choices, he said, just like the presidential election. He will
vote Republican, but Clinton or Trump — either way, it feels like a
losing wager, he said.

He still, warily, supports Mr. Trump. “It sort
of puts a little bit of acid in the stomach,” he said. “I just don’t
know what this world’s going to be like in 90 days. I have never been
more confused about my country.”

Even
with new resorts springing up on the Strip, home values recovering and
record numbers of visitors pouring back to this American playground,
thousands of people in golf-course mansions, gated condominiums and
stucco starter homes are still stuck in 2008, battling with their banks,
owing more than their homes are worth, trying to negotiate a sale to
avoid foreclosure. To visit this underwater America is to take a tour of
too-easy money, bad choices and worse luck, and of the way the economic
toll of the Great Recession still haunts much of America.

They
blame themselves, but their scorn for banks and bailouts runs as wide
and hot as the desert. The crash tarnished their faith in that core
American belief that buying a house was a foolproof path to security and
prosperity.

Vegas house in foreclosure

Housing
sales and prices are rebounding across Las Vegas, but the market was in
such a deep pit that families who bought at the peak or borrowed
against their homes say they may never see any return on their $240,000
starter home. Some who walked away are bouncing from rental to rental,
negotiating bankruptcies and trying to fix their credit. And they say
the tepid job market— Nevada’s unemployment rate is 6.4 percent, up
slightly in the most recent government survey— is an added weight.

To them, the economic recovery was a fickle storm that brought rain to some parched farms while skipping theirs. The frenzied market for million-dollar studio apartments in Manhattan and seven-figure bungalows in Los Angeles might as well be another planet.

A ‘Last Stand’

A
Marine veteran, Mr. Hutchings is now a block captain for the
neighborhood association near Sunrise Mountain, 10 miles east of the
Strip. Like many residents of the scattered American cities where violent crime
is rising, he got so concerned that he installed iron gates and 12
security camerasto watch over his 1-year-old son, Maxim, and 3-year-old
daughter, Natalia, as they play. When he takes them to the park, he goes armed.....

One in four homeowners in the Las Vegas area owes more to the bank than his or her home is worth, according to RealtyTrac.

That is the third-highest rate in the nation, behind Cleveland and
Akron, Ohio. And though prices are recovering, they are still below the
frenzy of 2005, when people lined up for open houses and bought homes
for nothing down.

Mr.
Hutchings skimmed through the neighborhood’s hodgepodge of
upper-middle-class wealth and suburban decay....One minute, he seemed ready to give
up. The next, he was determined to keep up the fight with his bank.

“This is my last stand,” he said. “I’m like that old farmer who won’t get off his property.”

Drive north to a quiet suburban street across
from an elementary-school parking lot where Mark and Anna Lissor taught
their son, and now their grandson, to ride a bike. The Lissors are
hitting retirement age, but they owe about $500,000 on an overdue home-equity loan
they used to remodel their house. They are hoping to negotiate a short
sale for less than the value of their loan. It would spare them
foreclosure, at least.

“I
was so stupid,” Ms. Lissor said. “How could I be so naïve? I just
didn’t realize what was going to happen. Our balance was going up every
month, every month. And then everything plummeted. And we were in the
hole.”

The
Lissors are Republicans: He wears a “One Nation Under God” T-shirt, and
their car has a National Rifle Association sticker. Still, Ms. Lissor
gives President Obama credit for creating programs that sought to keep
people in their homes. But she said the bailouts had ended up favoring
banks over typical homeowners. She sees Mrs. Clinton as a liar and a cog
in a rigged system.

As
Shawn, their grandson, tumbled across the living room couch in a
Captain America muscle outfit, Mr. Lissor walked into his study and
pulled up the real estate listings for the neighborhood. A galaxy of
blue dots filled the computer screen, each representing a house at some
stage of the foreclosure process....

‘They Brush Us Off’

Head
to the northern fringe of town, where waves of new homes run abruptly
into an eternity of desert. The Jansons live here, in a peach-colored
house they bought for about $290,000 at the height of the bubble. It was
their dream home, with enough space for their growing and grown
children and grandchildren, for the Christmases when they set up two
trees and cooked for 20 relatives. They are trying desperately to hold
on to it.

They
are all Democrats, and staunch Clinton supporters....Last
Christmas, her husband, Kevin Janson, 56, lost his $20-an-hour job as a
security guard at MGM Grand and took a replacement gig at a downtown
casino for $12 an hour. Ms. Janson was getting fewer and fewer hours at
the jewelry counter at Kohl’s. Then, in June, she was hospitalized with a
severe potassium deficiency, and said she had lost her job the day she
returned to work.

The
family started to strain to make $2,000 monthly payments on a loan
that, even at the best of times, “was a little bit beyond our means,”
Mr. Janson said. As the house’s value sank, they owed more than it might
ever be worth. They spent $3,500 and countless hours to modify the loan
and reduce the payments to a more manageable $1,500 a month. They have
Mr. Janson’s paycheck and his pension as a retired member of the Air
Force.